The offer that reads generous in New York and thin in Bengaluru

A US parent setting compensation for a senior India role generally reaches for one of 3 methods. Convert the headquarters band at the exchange rate and discount it. Apply a cost-of-living differential. Or hold a fixed ratio to the equivalent headquarters level, because that ratio was agreed once and has the advantage of being defensible in a review.

Each is internally consistent. Each produces a number somebody can explain to a compensation committee. And each answers a question the candidate isn't asking. All three begin from what the role costs at headquarters and reason outward. The market begins somewhere else entirely: from what this particular person can accept instead, from a firm that isn't you, within about a fortnight.

That's the whole gap, and it's why an offer can read generous in New York and thin in Bengaluru without anybody making an arithmetic error. The maths was fine. The starting point was a spreadsheet rather than a market.

When a senior candidate in India weighs your offer, the comparison set isn't your headquarters band and it isn't a national average. It's the 2 or 3 other conversations they're having right now, with product firms, with other capability centres, and with their current employer once the resignation lands. That set is local, specific, and often narrower than the client imagines. For genuinely scarce senior profiles, the people who can do the job know each other, and they know roughly what the seat clears.

This is why cost-of-living reasoning misleads so consistently. Cost of living describes what a salary buys. It says nothing about what a competitor will pay to take the same person off the market, and competition is what sets a senior number. Living costs don't. Where a capability is scarce and several well-funded buyers want it, the price rises to meet them regardless of what a flat in Whitefield costs.

The practical version is straightforward. Before setting a band, establish what the specific profile is closing at in the specific market, for the specific scarcity. That's a research question with a real answer, and it's the number the offer will actually be judged against. Everything else is a governance artefact.

For volume roles, a converted band is usually close enough. Supply is deep, the market is legible, and small errors get corrected by the sheer number of candidates moving through. The methods hold because nothing is scarce enough to break them.

Seniority is where they come apart, and they come apart in one direction. As the seat gets rarer, the local price is set by fewer buyers competing harder, and the relationship between the headquarters number and the India number stops being a ratio at all. A band built by holding that ratio constant lands closer and closer to the market as roles get more junior, and further away exactly where the hire matters most. The organisation then concludes that senior India talent is unreasonable about money, which is a comfortable read and the wrong one.

This is the same failure that produces the gap between a published band and a closed offer. The published band describes a policy. The closed offer describes a market. When those two drift apart at the senior end, the searches that stall are the ones nobody was willing to reprice, and they stall quietly, as a series of candidates who went cold rather than as a decision anyone made.

When a band has to move, the resistance is almost never about affordability. A single senior hire is a rounding error against a centre's cost base. The resistance is about precedent. If this person comes in above the band, what happens to the 3 people already inside it, and what happens at the next review when that becomes visible?

That's a legitimate concern, and it deserves a real answer rather than an exception. Exceptions are how bands quietly stop meaning anything. Each one is defensible, and after 4 of them nobody can explain the structure to the people living inside it. The organisations that handle this well don't grant exceptions. They reprice the band for that role family, in that location, and they say why, which is a governance decision rather than a negotiation tactic.

The uncomfortable part is that repricing usually surfaces something about the people already in the band. If the market has moved and your incumbents haven't, the new hire is revealing an inequity that already existed and would have shown up as a resignation a few months later. Handled that way, the conversation stops being about one candidate and becomes the more useful conversation about whether the structure still describes the market.

Every senior search carries a trade-off between the profile, the band and the timeline, because the perfect intersection is rarely available. A cross-border search carries it twice, because the profile was defined in one market and the band in another. The only real question is whether that trade gets made deliberately at the brief or by default at the offer.

Made at the brief, it's cheap and quiet. If the band is fixed, the profile widens here and the timeline extends there, and everyone knows it on day 1. If the profile is fixed, somebody starts the repricing conversation immediately, while there's still time for it to conclude before a candidate is waiting on an answer.

Made at the offer, it's expensive and public. The candidate is engaged, the committee has met them, the alternative offer has a deadline, and a compensation decision that needed 3 weeks of internal alignment now needs it by Thursday. That's how organisations end up doing the right thing at the worst possible moment, and paying a premium for the privilege.

The sequence that works is the reverse of the common one. Start from what the specific profile closes at in the specific market. Build the band from that evidence. Then do the work of explaining it to headquarters, in terms of the local competitive set, the scarcity, and what the alternative costs if the seat stays open another quarter.

That last figure is the one that usually moves the conversation, and it's almost never calculated. A senior seat left open doesn't cost nothing while it waits. It costs the decisions nobody is making, the team operating without an owner, and eventually the second search after the interim arrangement fails. Set against that, the gap between a converted band and a market band tends to look small.

Price the seat against the market it actually recruits from, and defend that number with evidence instead of arithmetic. An offer that reads generous in New York and thin in Bengaluru was never really addressed to the person receiving it.